Consumers today are well-versed in the art of online shopping, and no demographic knows this better than Generation Z (those born between 1996 to 2010). These digitally savvy youths are challenging retailers to rethink customer experience (CX), and will withhold or increase spend depending on its outcome. Shipping, as a key facet of the online shopping experience, is often overlooked when planning for CX, but this oversight comes with grave consequences for retailers.
The latest Neopost Shipping report, Great Expectations: Shipping, CX & Gen Z, explores the relationship between CX-friendly shipping practices and Gen Z conversion. The report found that Gen Z consumers have a higher-than-average tendency to respond positively when online stores offer extreme convenience in the form of new types of shipping services, and negatively when faced with shipping-related issues — which lead to cart abandonment. Let’s look at how shipping impacts the CX journey of Gen Z shoppers.
Gen Z Needs Shipping to Reflect 24/7 Nature of Online Shopping
More than others, Gen Z is drawn to online shopping because it’s accessible 24/7. Similarly, Gen Z expects online purchases to be delivered anywhere and anytime — and often this means right here, right now. Gen Z’s demand for paid shipping services such as express, same-day, hyperlocal (one hour to three hours), and weekend/after-hours delivery has increased significantly from 2016 to 2017, while standard delivery has dropped.
To incorporate this trend into your CX strategy, consider rewarding return customers with premium shipping offers or introduce higher spend thresholds for free and fast shipping. This approach will better satisfy customers who shop last minute or are simply in need of instant gratification.
Gen Z Solves Shipping Friction by Abandoning Carts
Ninety-eight percent of Gen Z consumers will abandon their shopping cart if the shipping option of their choice is unavailable at checkout. When they abandon cart due to this reason, 44 percent will opt to buy from a competing online brand, 33 percent will attempt to visit the brick-and-mortar store of the same brand, and 21 percent will plan to visit the mall. Are those chances that you’re willing to take as an online retailer?
Clearly, blocking the path to purchase with limited or no option except for standard delivery is bad for business. Yet the report found that despite demand from 52 percent of Gen Z for same-day delivery, only 24 percent of retailers offer it. The same goes for hyperlocal delivery; 53 percent of Gen Z wants it, but only 36 percent of retailers offer this option.
Gen Z Thrives on Getting Premium Shipping for ‘Free’
As one of the youngest consumer groups, Gen Z is understandably cost conscious, but that doesn’t mean they’re always looking for a free ride. Gen Z will put their money where their mouth is when it comes to securing free premium shipping. Seventy-one percent said that they’ll spend more to qualify for free hyperlocal delivery compared to 56 percent of other consumers. Furthermore, 44 percent of Gen Z shoppers would do the same for next-day delivery vs. 25 percent of average consumers.
This insight shows that introducing new and alternative shipping options don’t necessarily have to mean that you’re increasing the baseline of losses. In fact, you could look at these new types of shipping offers as tools that can help you convert, retain and grow the basket size of each sale.
A shipping strategy that meets the demands of Gen Z is a competitive advantage that can be implemented at scale. To have the capability to orchestrate this complex set up, retailers need to modernize their supply chain infrastructure. This can include a powerful shipping software solution that makes personalizing shipping options a breeze. An eMarketer study on U.S. senior decision makers found that customer satisfaction, customer retention and sales growth are the top three outcomes of CX personalization. Therefore, take advantage of what you now know about Gen Z and transform your CX with shipping.
Matthew Mullen is senior vice president of the Americas, Neopost Shipping, a division of Neopost that helps retailers, carriers, and postal operators put customers at the heart of the delivery experience with multicarrier shipping software, smart parcel lockers and automated packaging machines.